How Alibaba Aims to Revolutionize Chinese Tourism with Fliggy

International

An Exciting Travel Market in Transition.

At this year's ITB China, industry expert Charlotte Lamp-Davies (Founder, A Bright Approach) spoke with Chris Ma, Vice President at Fliggy, about the company's positioning within the Alibaba ecosystem, travel trends, and the integration of technology in the travel sector.

Chris, could you start by giving us an overview of Fliggy and how it is positioned within Alibaba's ecosystem?

Fliggy is a business unit within the Alibaba Group. We operate an online travel service platform that supports a diverse ecosystem in which businesses can build their own brands and offer services directly to consumers. Through the Fliggy platform consumers can access a wide range of global travel services, including 25,000 non-stop flight routes, 1.5 million hotels and homestays, over 8,000 tourist attractions, and nearly 60,000 travel itineraries.

With 400 million+ registered users, Fliggy is a crucial link for travel businesses to reach over 1 billion active consumers1 within the Alibaba Ecosystem in China, As the go-to platform of millennials and next-gen travellers, we connect our partners to a demographic that is tech-savvy and eager to explore the world, providing immense growth opportunities for a range of businesses.

Leveraging the extensive e-commerce expertise and technological capabilities of the Alibaba Group we offer a full suite of marketing solutions and a comprehensive transaction and guarantee system to help businesses grow and increase brand exposure. For example, during the annual Double 11 online sales event last year, Fliggy hosted 14 brand stores each with sales exceeding RMB100 million, a significant increase from 9 stores in 2022 and 2 stores in 2019.

What can you us about post-COVID travel in China, domestic, and outbound?

The recent Labour Day holiday week travel figures showed that domestic and outbound travel spending of Chinese tourists had fully rebounded and now surpassed the 2019 pre-COVID level.

Visa waivers between China and a number of countries/regions have boosted outbound travel demand. Transportation capacity and supply chains are also recovering, indicating that the growth is a sustained trend. During this year’s Labour Day holiday, the total bookings for our outbound travel products continued to rise, almost doubling from the previous year's rapid uptick.

Individuals are now prioritising more immersive experiences in their journeys and there is a growing preference for independent travel in outbound tourism.

The traditional model of large tour groups for domestic travel is shifting towards smaller, more intimate experiences such as charter services, private tours and personalised tours, which are experiencing significant growth. Excluding price fluctuations caused by the slow recovery of international travel, average customer spending for outbound travel has increased noticeably, and so has the number of items booked per person.

In your capacity as head of the vacation business, how do you cater to the evolving consumer behaviours and travel patterns in terms of business strategy and offering?

The travel market is changing, and people are more interested in experiential travel. In view of this, we have created a product called “Group Tour Route Repository” to help businesses organise segmented and non-standard group tour services, highlighting unique experiences and services based on consumer need. These might include a range of elements such as hiking, flower viewing, skiing, or incorporate special meals such as whole roasted lamb or hot pot. This makes it easier for consumers to find routes that suit their personal interests at the same time as matching supply and demand more efficiently.

We have made further deployments around demographic groups with specific travel needs, such as customers of well-known brands. Our membership program is fully integrated with over 40 prestigious travel brands, that offer dual points and exclusive benefits from both sides. Members will earn points and corresponding membership perks for various travel experiences when making bookings and purchases at these brands' Fliggy flagship stores. Partners of this programme include Marriott International, MSC Cruises, Club Med, Chimelong Tourist Resort, China Express Airlines and two Bicester Villages in China. This program has improved customer loyalty and boosted brand membership growth by providing an exceptional consumer experience that exceeds expectations.

For the European tourism market players looking to enter the Chinese market, what advice would you offer?

The Chinese consumer market has gone digital, with a sophisticated social media ecosystem shaping consumer behaviour. The competition between destinations for consumers' attention and spending has increased, making it necessary for each service provider to differentiate themselves and explain why they are the best choice.

Travel service providers nowadays have to prioritise the consumer, understanding their needs and delivering products that not only meet but exceed their expectations. When entering the Chinese market, it's important to not only build brand visibility but also focus on sales conversion. Consumers' attention is fleeting, and the high cost of traveling to Europe, including not only financial costs but also the time and effort required for visa application, trip planning and managing time zone differences, emphasises the importance of combining brand visibility with sales.

Can you highlight some emerging consumer travel trends in China that present opportunities for the European market players?

Consumer trends in the travel industry are evolving. People want to create their own travel experiences instead of just taking what service providers offer. In addition to traditional tourist attractions and amusement parks, there’s a growing interest in off-the-beaten-path spots and attractions. History, culture, local cuisine, and fun activities like concerts and sports games are becoming increasingly important factors for people when they choose where to travel. As a result, there are now significant opportunities for theme tours, such as cultural and heritage tours, food tours, and sports tours.

In terms of product trends, the “Buy Now, Plan Later” travel package has gained popularity among Chinese travellers. Consumers are taking advantage of special sales events like Double 11 and 618 to buy travel packages that allow them to book their travel later. These packages come with discounts and flexible refund policies, making it easier for consumers to make decisions and have a better travel experience. In 2023, there has been a significant increase of over 100% in the number of people using “Buy Now, Plan Later” travel arrangements compared to the previous year. About one in every four 4 to 5-star hotel in China have had guests using this kind of arrangement.

Chris Ma is Vice President of Fliggy and Head of Holiday Business at Fliggy, a subsidiary of Alibaba Group. Previously, he was Vice President of Atour Group (NASDAQ: ATAT), a leading upscale hotel chain and lifestyle brand in China. Previously, Mr Ma worked for leading technology companies in China, including Sina Corporation, Baidu, Inc. and Qunar.com. He is a graduate of the School of Business at Renmin University of China.